The truth behind the Hypnochem 1987 scam
In 1987, a scam shocked the financial world and shocked the whole world. It was called the \”Hipnokai Scam\”. Some people also believe that this is a true portrayal of the financial world depicted in the popular movie \”Wall Street\”. Below we explore the truth behind this scam from multiple aspects:
Reenactment of the incident
In 1992, a South African company was dubbed \”South Africa Hypnokai\” because of its suspicion of inflating profits and committing fraud. Likewise, in 1995 and 2011, victims claimed to have encountered different versions of the HypnoKai scam. What these incidents have in common is that they involve high false earnings promises, complicated financial transactions and asset transfers, and extremely out-of-control financial records and audits.
How to copy the root causes of scam success
The success of the scam is inseparable from their deep understanding and full use of human nature. The first is to take advantage of people\’s greed and promise high profits to attract customers. Secondly, they will create a \”sense of security\” for customers, so that customers feel that their funds are completely safe and can make more decisions about transactions. Finally, they market to people with asymmetric information and lack of expertise, who have not been exposed to similar financial transactions and products before.
Lack of transparency
The biggest problem with the Hypnochem scam is the lack of transparency. Because the transactions and asset transfers involved are too complex, and most of the people involved are professionals related to financial transactions, ordinary people cannot understand the contents at all. In addition, there were also omissions in the audit, including the negligence of the audit unit and the lack of communication and interaction between partners.
Wealth inequality and hidden dangers in the financial system
Through the Hypnokai scam, we discovered a serious problem, which is wealth inequality. The main purpose of the scam is to obtain funds, and the money of these defrauded people is often all their savings. For some financial transaction intermediaries and business personnel, although they have used their professional knowledge to cause serious economic losses, their punishment may only be the loss of a job.
The importance of risk management
The lesson from the Hypnokai scam is that risk management is crucial. In fact, this is not just a problem in financial transactions, but should run through all aspects of business management. Within financial institutions, a complete risk assessment mechanism and risk control system need to be established. Ordinary people should also understand the methods of these scams, understand the true appearance of investment products, and not be greedy for high profits.
The outbreak of this scam has caused people to think deeply about financial markets and capital operations, emphasized the importance of transparency and risk management, and provided a good way to deal with and prevent false pyramid schemes and fraud.
